Prestige of Beverly Hills, Inc. v. Weber
| Decision Date | 21 March 2012 |
| Docket Number | No. 55837.,55837. |
| Parties | PRESTIGE OF BEVERLY HILLS, INC.; Amir Shokrian; and Beverly Rodeo Development Co., Inc., Appellants, v. Richard WEBER, Respondent. |
| Court | Nevada Supreme Court |
Montez Nazareth Law
Robert Hernquist, Lionel Sawyer & Collins/Las Vegas
This is an appeal from a district court order granting summary judgment in a tort action and from a post-judgment award of attorney fees. Eighth Judicial District Court, Clark County; Michelle Leavitt, Judge.
Facts and procedural history
Respondent Richard Weber filed a complaint in the district court asserting that the roots from trees on a neighboring property encroached upon his property. He claimed that this encroachment destroyed a boundary wall and damaged his pool plumbing, pool deck, and sprinkler system. At the time of Weber's complaint, the property on which the trees grew was owned by appellant Prestige of Beverly Hills (Prestige), a Nevada company owned by appellant Amir Shokrian. In November 2008, Weber filed a motion for a preliminary injunction requiring Prestige and Shokrian to remove the trees, and requested damages for the wall's destruction.
By stipulation of the parties, January 2, 2009, was established as the date for expert disclosures and February 2, 2009, as the final day to disclose rebuttal experts. Weber retained and timely disclosed several experts—a master arborist, a construction consultant, and a construction contractor—who had investigated the property and prepared supporting expert reports. Largely, their reports established that the wall collapsed because of tree roots on Prestige's property and that lasting repair of the wall could not be accomplished without removing the trees.
On January 28, 2009, just a few days before the deadline for disclosure of rebuttal experts, Prestige filed for bankruptcy and, under 11 U.S.C. § 362, litigation was stayed. That selfsame day, Prestige recorded a deed showing that it had transferred the forested property free of charge to Beverly Rodeo Development (Rodeo), which, like Prestige, was wholly owned by Shokrian. The recorded deed indicated the transfer had been made in November 2008. Weber then amended his complaint to include Rodeo as a defendant and alleged that Prestige and Rodeo were alter egos of Shokrian.1 On March 17, 2009, the U.S. Bankruptcy Court lifted the stay, allowing Weber's suit to proceed.
Almost two months passed. At the beginning of May 2009, Weber moved for summary judgment. Then, on May 14, 2009, Shokrian asked the discovery commissioner for an extension of discovery and more time to disclose rebuttal experts—or, more accurately, to reopen the time to disclose rebuttal experts, since the motion came several months after the stipulated deadline for disclosing experts had passed. The discovery commissioner acceded to this request in its entirety but the district court, at Weber's urging, pruned the commissioner's order to deny Shokrian additional time to disclose rebuttal experts. Consequently, at the preliminary injunction hearing that followed, Weber provided testimony and reports from his experts but Shokrian put up no witnesses. Weber's experts established that the trees' roots caused damage to the wall and that to rebuild the wall would require removal of the trees.
The district court granted the injunction and instructed Shokrian to remove the trees. Thereafter, the district court took up the summary judgment motion. After the summary judgment hearing, the court entered an order concluding that “[n]o issues of material fact exist as to Defendants' liability on Weber's claims for trespass, nuisance, and negligence.” But this did not resolve everything. Weber had not presented sufficient evidence to settle the amount and extent of damages. To address these issues, the district court scheduled and held a later “prove-up hearing” (which neither Shokrian nor his counsel attended, later claiming lack of notice). After this hearing, the district court concluded that Weber was entitled to summary judgment on damages, as well. The district court awarded compensatory damages of $28,286.69, assessed punitive damages of $100,000, and determined that Prestige and Rodeo were alter egos of Shokrian and each other, and entered judgment accordingly. After a subsequent hearing on attorney fees, the court awarded attorney fees of $73,096 based on NRS 18.010 and costs of $9,630.44, along with $2,510.15 in prejudgment interest.
Shokrian appeals from the district court's final judgment and raises several issues: (1) that the district court erred in failing to extend (or reopen) the discovery deadline; (2) that he was provided inadequate notice of the prove-up hearing; (3) that the district court erred in finding that Prestige and Rodeo were alter egos of Shokrian, and therefore he cannot be held responsible for trees on property those entities owned; (4) that the ratio of punitive to compensatory damages is unconstitutionally high; (5) that the district court abused its discretion in awarding attorney fees under NRS 18.010 ; and (6) that there was not substantial evidence of fraud or malice to justify punitive damages.
A.Denial of time extension for expert disclosures was not an abuse of discretion
Shokrian argues that the district court abused its discretion by denying his request to reopen the discovery deadline for disclosure of rebuttal expert witnesses. Francis v. Wynn Las Vegas, 127 Nev. ––––, ––––, 262 P.3d 705, 712 (2011). Specifically, he argues that it is an abuse of discretion not to reopen a discovery deadline that expires while litigation is stayed by a party's bankruptcy proceeding. He also argues that litigation had been ongoing for only thirteen months before summary judgment was granted and he should have been given more time for discovery under NRCP 56(f). Neither argument carries. “Absent a clear abuse of discretion,” In re Adoption of a Minor Child, 118 Nev. 962, 968–69, 60 P.3d 485, 489 (2002), this court will not reverse a district court's management of discovery, NRCP 16(b), and we find no abuse of discretion here.
Under 11 U.S.C. § 362(a), a bankruptcy petition “operates as a stay ... [of the] continuation” of an action. 11 U.S.C. § 362(a) (2006). “Discovery is considered part of the ‘continuation’ of a proceeding and is, therefore, subject to the automatic stay.” In re Manown, 213 B.R. 411, 412 (Bankr.N.D.Ga.1997). Thus, discovery is ordinarily halted for a party who is in bankruptcy and, for the sake of Shokrian's argument, we will assume that bankruptcy also tolls discovery deadlines like the rebuttal expert disclosure deadline.
But once a bankruptcy stay has been lifted, discovery can resume “where it left off before the bankruptc[y] w[as] filed.” In re Carriage House Condominiums L.P., 415 B.R. 133, 145 (Bankr.E.D.Pa.2009) ; Plant v. Merrifield Town Center Ltd. P'ship, 711 F.Supp.2d 576, 585 (E.D.Va.2010) (). And once a party recovers from the bankruptcy stay, it must diligently pursue any post-stay relief. Velez v. Seymour Moslin Assocs., Inc., 278 A.D.2d 164, 719 N.Y.S.2d 11, 13 (App.Div.2000) ; 8A C.J.S. Bankruptcy § 507 (2009) (); Rutter's, California Practice Guide to Bankruptcy §§ 8:1145 (2010).
In this case, Shokrian dallied for nearly two months after the bankruptcy stay was lifted before asking for more time to disclose rebuttal experts. See Velez, 719 N.Y.S.2d at 12 (). This was after the parties had previously extended the discovery deadline by stipulation. The court considered these circumstances and noted in its order denying more time that:
The record is very clear that defendant was told on numerous occasions of the pending deadline and chose to ignore it and not provide his counsel with the appropriate information to retain an expert witness. The bankruptcy had nothing to do with defendant's failure to disclose an expert witness by the original deadline.
At a hearing a few days later, the district court orally explained its reasoning to Shokrian's counsel: Shokrian's first attorney had pressed him to retain experts to no avail and Shokrian, as an individual defendant, could have retained an expert despite Prestige's bankruptcy because the stay did not apply to him. In re Richard B. Vance and Co., 289 B.R. 692, 696–97 (Bankr.C.D.Ill.2003) (); Rutter's, California Practice Guide to Bankruptcy § 8:350 (2010).
Given these facts, we cannot conclude that the district court abused its discretion by deciding not to reopen Shokrian's deadline for disclosure of rebuttal experts. See Commc'ns Maint., Inc., v. Motorola, Inc., 761 F.2d 1202, 1207 (7th Cir.1985) ().
Shokrian also argues that litigation had been ongoing for only thirteen months and summary judgment is not appropriate when a party “seeks additional time to conduct discovery to compile facts to oppose the motion.” Aviation Ventures v. Joan Morris, Inc., 121 Nev. 113, 118, 110 P.3d 59, 62 (2005). But Shokrian did not move for NRCP 56(f) relief, which allows a party who does not have evidence to rebut summary judgment to ask the district court for more time by affidavit. See Choy v. Ameristar Casinos, 127 Nev. ––––, ––––, ...
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